16% contributory profit is not a slim margin. AWS made a quarter-billion profit on 1.67 gross revenue. That's better than 80% of the industries, beating brokerages, beverages, and pharmaceuticals, according to this NYU study here: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
The barriers for entry to Cloud are actually higher than for airlines IMO. In the long run it will become more like the utility industry (think electricity) than airlines.
To get into the same cloud market as AMZN/MSFT/GOOG you are going to need:
1. Several billion dollars of Capex to get to the same scale as the incumbents.
2. A large amount of investment to replicate all the internal software that Amazon and friends have.
3. Goodwill from startups and/or enterprise CIO types.
Getting into the airline business is comparatively easy:
1. You lease the planes from Boeing or Airbus.
2. Pilots and other staff are highly skilled but otherwise fungible.
3. Marketing through traditional consumer channels and price comparison engines is very well understood and if you're willing to eat the losses then growing share is doable.
Getting into the cloud, and getting into the cloud on the same level as Amazon, Microsoft, or Google are two different things.
Just like getting into the airline business, and getting into the airline business to compete with the likes of American Airlines, Lufthansa or United Airlines are two different things.
The same overly simplistic business plan could just as easily be applied to 'getting into Cloud', and while leasing a few business jets off Boeing has it's own page on boeing.com[1], it's still a significant expenditure.
Here's the same plan:
1. Lease a pile of servers from Dell or HP
2. Developers, Sysadmins, and other staff are highly skilled but otherwise fungible. OpenStack is rapidly maturing so you can take advantage of that.
3. Marketing, marketing, marketing. Through newer online social media channels instead and compete on price.
Airlines are famous for making only meager profits, especially considering the capex required to play.
Since Cloud is still a relatively immature industry, there's still room for niches, just like the airline industry has regional airlines. All GPU cluster anybody? Bare-metal Private Servers? Digital Ocean and Rackspace are chugging along just fine.
How about selling of Cloud services that run on top of AWS? Is that still Cloud? Dropbox famously started off just running on top of Amazon's S3, and I'd definitely call them Cloud. How about if you setup Heroku for Erlang? Scala? No billion dollars of Capex required, and I'd still definitely call Heroku a Cloud business.
Trying to compete with the likes of Amazon, Microsoft, or Google without billions of dollars is tilting against windmills, but to say 'getting into cloud' requires several billion dollars at the outset is a bit of an overstatement.
You already lost the game. The entire point of cloud computing is you don't need any of the features that Dell and HP heap onto their servers. Every port, every button, every LED costs you another couple hundred mW.
I guess by "getting into cloud" I meant "creating a competitor to AWS".. I agree that Dropbox, Heroku and friends are all cloud businesses but they are not direct competitors to Amazons IaaS business.